Exclusive interview: Gerald Ronson

In a rare personal interview Gerald Ronson, the property tycoon who came back from the Guinness scandal, reveals his prescription for surviving the downturn - as the Chancellor tonight delivers a crucial speech to the City on the economy

Height of ambition: Gerald Ronson

Gerald Ronson wants to know if I can recommend a restaurant where he won't get pestered. 'I eat out four nights a week and I go to all the same places. The tables are always too close together and people come up to me and say, 'Hello, Gerald' and 'How are you, Gerald?' and I just want somewhere quiet. Even better, I'd like somewhere to smoke a cigar. I've got to do that when I get back home now and I don't feel like one late at night.'

There is no one in London quite like Ronson. Aged 69, he is the undisputed king of property, the last of the great barons who can trace their careers back to the 1950s. He's a tycoon who's weathered recessions, who lost a fortune and made another, a member of the Guinness Four who went to jail and paid his dues for his part in the illegal share support operation, a major philanthropist, father of four daughters and husband of the glamorous Dame Gail who, when he was led out of the dock, shouted to him across the well of the court: 'I will love you for ever.'

He is an old-style magnate, running his Heron private empire for himself, his family and his unseen, mostly foreign, investors. While other bosses are made to stand down and hand over the baton, he presses on regardless.

In the City, he is constructing a 663ft skyscraper, comprising 46 storeys and costing £500m. In typical Ronson fashion, Heron Tower won't offer five-star office accommodation but 'six-star'. He's also developing Milton Court in the City, a new home for the Guildhall School of Music & Drama and the Square Mile's highest residential building. There are other projects as well in the UK and Europe.

He's got other strings to his bow apart from property - he introduced the self-service petrol station to Britain and he still owns 74 garages, out of the near-1,000 he has built down the years.

His annual lunch for the chiefs of the property world, many of them his rivals, is one of the highlights of the industry year. It's a spectacular affair. This year's, in April, was at the Dorchester and 370 leading developers, politicians, agents and financiers came en masse to pay their respects to him. He stood, darksuited, by the door, his brown hair swept back. A big man, powerfully framed even now, he cut an imposing figure. He shook the hand of every guest and for many, he had a whispered word or two.

In his speech he always gives his views as to the coming 12 months. So, he said, anyone 'who believed property was a fast track to riches is now learning harsh lessons. In the early 1990s I stood before you at the time of the last downturn and said it was about staying alive to '95 and going to heaven in '97'. He added: 'So we've had our 10 years of heaven.'

With one eye on the brasher members of his audience, he quoted Warren Buffett, the world's richest man: 'Only when the tide goes out do you discover who has been swimming naked.'

Now, two months later, we're in his office in Marylebone Road. His silver Mercedes, which bears the letters AAA as the last part of its registration, is parked outside. We're sitting in the boardroom. On my right are portraits of Gerald and his father, Henry (Heron is named after him). On my left is a detailed model of the Milton Court complex. Opposite is Ronson, wearing a blue shirt with the initials GMR stitched on the cuff.

Do you still feel the same as you did at the Dorchester? Without a hint of a pause, he replies: 'I wish I was wrong but I'm not.' He feels in Britain we're only just starting to experience the worst, whereas in the US, due to the greater intervention of the authorities, they are much further ahead.

'The Fed has a more aggressive attitude - they deal with the problem and move on. They will have worked the difficulties through their system by the end of this year. A big proportion of the aggravation will be over so they can move on.'

The US, he says, has realised 'the importance of getting its capital markets functioning and allowing banks to rebuild their balance sheets'. In the UK and Europe 'heads are in the sand and it will take longer to work through'.

He holds up his hands. 'I'm not a politician and I'm not a banker. I'm just a businessman and property developer. But I do know the problem is greater than is being discussed. The cost of materials and commodities is shooting up and being driven in part by speculation. The Government and Bank of England should have been aware of the coming slowdown earlier. Action needs to be taken on a number of fronts. They need to be seen to be working proactively and getting their heads round things they can do as opposed to things they can't.'

Tonight Alistair Darling will deliver his Mansion House speech to the City in which he will outline the twin challenges of the credit crunch and a slowing economy.

'I don't want to be Chancellor of the Exchequer but we do need people in charge who understand business, understand the capital markets and can get things moving. At the moment it's like watching a movie in slow motion.'

Politicians and the Bank, he says, 'don't realise how fast the economy is weakening. They need to get confidence back'.

He doesn't think the dip in property prices will be across the board. 'There is a shortage of prime-prime. Secondary properties will get cheaper but primeprime is like a blue-white diamond - it will not go down.'

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The City, he predicts, will be waiting for the proposed towers, other than his own, to be built. 'In Bishopsgate, our cranes are up, our contracts are placed and the deal is financed. The others will see a little bit of demolition but no real building contracts placed.'

London, he is certain, will pull through - but only if the Government sorts itself out. 'It's the greatest financial city in the world - it's where the Russians, Arabs and Asians all want to be.

'The Government needs to send out clear signals that it is not hostile to overseas investors. Taxation has to be made more user-friendly and the non-domiciles need to feel welcome.

'I believe the Government is sensible and it's got the message but I'd like to see an improvement in the way signals are sent out. There's too much delay on lots of things - people need a kick up the backside.'

Such as? 'Look at Crossrail. It's exceptionally important for London - more people, 47m people, use Liverpool Street station than Heathrow, yet Heathrow gets all the attention.'

Ronson was a supporter of Ken Livingstone and he backed his mayoral campaign. 'Any major developer has to work with the Mayor - that's the same in any major city, whether it's Beijing, New York or London.'

Since he was elected, Boris Johnson has hired Sir Simon Milton from Westminster council with a mandate to protect London's historic views. 'I've known Simon for about 15 years,' says Ronson. 'I don't have a problem with him. Listen, I've been in the property business for 50 years, not 50 minutes - we're thinking very long-term. And besides what people say, Ken was no pushover. He never did us any favours - we worked together on a sensible basis, that's all.'

What we're experiencing now is not new for him. 'There have been at least three recessions in my lifetime. I can remember back to the 1960s when there were lean times. I've seen this coming - the past few years I've been moving into cash. We've got more than £200m in the bank. Right now, cash is king.'

He shakes his head. 'It baffles me that people never learn from the past. I've made major mistakes, as has been recorded, and I've learned from them.'

In the early 1990s Heron almost went under when its investments in the US turned sour. Ronson cut his cloth and effectively started again, with the backing of, among others, Michael Milken, the former junk bond whizz, and Larry Ellison, the computer multi-billionaire. 'We've been partners for 18 years and we've never had a row, never had a major disagreement.' He smiles and growls: 'They think I'm a pussycat.' He has no plans to retire. 'So long as I've got my marbles and so long as my shareholders want me to, I will carry on.' He fixes me with a stare. 'Plenty of CEOs in the US are working well into their seventies, so why not me?'

Before I ask, he says: 'No, I don't play golf. I enjoy getting up and going to work at 7.30am. I like being abroad - at least one day a week I'm in France, Spain or Sweden looking at our properties and sizing up new opportunities.'

About 20% of his week is spent on his charitable foundation. 'I do a 90-hour week. I work for six-and-a-half days. Always. Monday to Friday is Heron. Saturday morning I start at 8.30am and finish at 1pm, visiting the petrol stations. Sunday is for the community. It's a very full, very interesting life.'

He is building a Jewish faith school in Barnet. The Government is putting in £40m and he's pledged to find the other £10m. In all, he says, he's given £30m to charity down the years and raised £100m. His reasoning is simple and firm. 'You have to put something back into society. You can't just take.'

His foundation stands to gain even more. 'I've bequeathed all my shares in Heron to the Gerald Ronson Foundation. They're not going to my daughters.'

But if he did nothing, I venture, nobody would cavil - after all, he was jailed, and if he held a grudge against the system that would hardly be a shock. 'Guinness started on 1 December 1986. It's now 2008. I don't think about it. I never believed I'd done anything wrong. I don't gripe about it - I've never griped from the day I walked out of the gates of Ford Prison. I kept my head up and determined to get on with my life. I am an honest person - I've never had a problem looking in the mirror.'

Heron's subsequent problems, which started soon after he came out of prison, were more traumatic than Guinness, he suggests. 'I had to give away 95% of the business to third-party investors. You build up a huge business - it had assets of £1.66bn, about £4.5bn today - and then it's gone. I put my head down and got stuck in. I'd do the same today if it happened again.'

He's done it, he says, 'by always looking forward. If I wanted I could sit here and be miserable and make myself very angry. But that would eat me up - and then the enemy has won. You must pick yourself up, dust yourself down and get back in the saddle.'

It does hurt, though. I mention Jack Lyons, a fellow Guinness defendant who has just died. Lyons did not go to jail because he was suffering from ill-health. 'It hit Jack hard,' he says. He smiles a rueful smile. 'But it's true, he lived to a ripe old age and Ernest Saunders [another accused] was freed early because he had pre-senile dementia and he is still alive. Tony Parnes [the fourth] has disappeared from view. You could say the only one who has kept their head up and stayed with it is yours truly.'

He means it but he's grinning. He extends his hand. Time is up. He's got a meeting to go to.